In Cyprus, the Finance Minister, Charilaos Stavrakis, reported to the House Institutions Committee that illegal land gambling and online gambling together were depriving the economy of revenue of Euro 2.5 billion a year. This led to serious concerns as to why there is no law banning or regulating online gambling in Cyprus.

At first the reason given was that the European Union follows the principle of free movement of goods and services between member nations. Cyprus has to honor that principle and therefore it becomes difficult to ban online gambling. But the Government is willing to take up the issue with the European Union. First they must have a draft law in place. Actually in 2004 international consultants were engaged for the drafting of a law that would regulate online gambling. However there were allegations of collusion between the consultants and the online gambling interests and the exercise was dropped. A new bill is currently being drafted. Once that is done it will require the approval of the European Commission. Then the process of enacting the bill will have to be undertaken. Stavrakis has promised to put all this on a fast track route.

Meanwhile the Government has asked the police to step up their efforts close down illegal land gambling establishments. However these efforts are not proving successful. The reason cited by the police is that the fines are a pittance compared to the profits and hence the operators pay the fines and start the gambling establishments again.

In the Czech Republic the problem is somewhat different. The Czech Republic had decided to license and regulate online gambling. Offshore online firms were anyway catering to online players from the country. This move by the government enabled local companies to share the online gambling market. However this has led to a decline in land based gambling.

It is mainly the land based gambling companies that had entered the online market. One of the largest of such companies was Tipsport, which operated over a thousand retail gambling outlets. After barely three months, 30% of Tipsport’s revenue comes from online gambling. Today many of Tipsport’s retail gambling outlets are unviable and will have to be closed. The spokesman for Tipsport, Lubomir Jezek, said “After the first analysis, we see that many clients who used to bet online with foreign companies are coming to Tipsport. Czechs like to bet with Czech companies, and we think this will continue.” Fortuna is another land based gambling operator that has started an online gambling wing. Fortuna echoes sentiments identical to Tipsport. 25% of the revenue now comes from online gambling and land gambling business has declined 5%. Tomas Bahnik, a spokesman for Fortuna, pointed out that Czech online operators were still at a disadvantage as compared to offshore online operators. He said, “Czech companies still have worse conditions than foreign betting companies, which don’t have to pay taxes.”